Haines borough photo

The contractor tasked with rebuilding Lutak Dock spent nearly $10 million on steel without authorization from the federal government. Haines Borough officials say they didn’t authorize the purchase either.

But, documents shared with CVN raise questions about what borough officials knew and when. They include a Nov. 17 email from Turnagain informing the borough that it had spent millions after it was “authorized to commence work on Phase II” of the project, before getting federal approval.

In an interview late Wednesday, manager Annette Kreitzer said the borough had been clear with Turnagain that it was not authorized to make any purchases.

“They did this at their own risk,” said Kreitzer.

Representatives from Turnagain did not respond to multiple requests for comment about what they understood about the project.

Haines Borough Assembly members have been digging into the project and have a meeting scheduled next week with the U.S. Department of Transportation’s Maritime Administration (MARAD) which has committed $20 million to rebuild the aging dock. With the revelation that the contractor has spent millions – potentially endangering the borough’s ability to get reimbursed for the project.

Mayor Tom Morphet called for a special meeting Friday at 3 p.m. with the borough manager, public works director Ed Coffland, and the borough’s attorney. He said he would also be inviting Jason Davis, the head of Turnagain to answer questions at the meeting.

“It’s a gut shot,” said Morphet about learning about the $10 million purchase on Friday afternoon, “What gave Turnagain the confidence that they could just go ahead and do this?”

Morphet said he is also concerned about why he and other assembly members weren’t made aware of the issue until more than a month after Turnagain informed the borough of the purchase.

Kreitzer said Turnagain’s Nov. 17 email came when she was preparing to catch the ferry during a snowstorm for a several-week-long vacation and had appointments throughout the day. She saw it but didn’t register its significance, she said.

“The three days I was working remotely from Juneau before I left on vacation, frankly there were other things that came up,” she said. When asked whether she regretted not prioritizing the issue, she said “absolutely.”

In a written statement, Kreitzer said Turnagain’s decision to order steel was based on the prospect of rising costs, and said Turnagain didn’t inform the borough until November, after the purchase had been made.

Aside from the steel purchase, there are other issues between the borough and the contractor. Federal contracting and environmental permitting rules require that the project be designed in stages.

Kreitzer insisted the project has only been approved for 95% design, as allowed under federal rules.

But the borough sent a Notice of Intent to Award to the company on March 2, giving Turnagain authorization to proceed with 100% design, another apparent violation of federal rules. The memo was signed by Carolann Wooton, who left the borough shortly after to work for Constantine Metals, which is exploring a deposit 35 miles north of Haines.

Kreitzer shared emails from herself to other borough officials in May clarifying that design of the project shouldn’t exceed 95% until NEPA permit is acquired. She said Turnagain Marine Construction, the company selected for the contract, was operating with that understanding.

“They have not done 100% design. If they are sitting on 100% design, they have not told us that,” she said.

In a Dec. 14 email, to Turnagain, she wrote “to the extent that Turnagain has performed any work that hasn’t been authorized by MARAD, please stop this work so that we can coordinate with MARAD in finalizing the grant agreement.

Even before the more recent revelations about contractor money spent on supplies, assembly members were raising questions about the project and its oversight.

“I don’t feel like we are adequately managing the project right now,” said Natalie Dawson. “The contractor is currently driving the process.”

The project to rebuild the aging dock has gained increasing attention and community concern over the last year as the borough works through its permitting and grant agreements.

The borough is facing a June 30 deadline for completing its final plan, and a Sept. 30 deadline to enter into a fully executed grant agreement. And $20 million from a federal grant needs to be spent before Sept. 30, 2029, according to emails from a MARAD representative.

MARAD said in a Dec. 19 email to Mayor Tom Morphet that the office is “in the fact finding phase and is going through its internal evaluation process regarding the recent developments” – and wouldn’t release results until that process is complete.

In her written statement, Kreitzer said the borough must turn over all of its contracts and communications to MARAD by Dec. 26 but “has no information that would suggest that Turnagain’s unilateral purchase will endanger the MARAD funding or render the funds ineligible for reimbursement.”

But she said the first step moving forward would be to hear from MARAD.

“The first hurdle we have to get through is to provide MARAD with all this information to see if we still have a project,” she said.